Why are Lebanon's apartments 'shrinking'?
Leading real estate developers revealed a trend toward downsizing apartment space Tuesday, expressing optimism over the continued success of the real estate market despite security tensions.
“We have a great market, Lebanon is one of the 12 rising stars in the real estate industry” Samer Bsat, senior development director at Waterfront City told The Daily Star during the Real Estate and Property Exhibition at BIEL.
According to Bsat, although the industry is naturally attached to the security situation, Beirut has a unique make up in the region and a stable real estate sector that will continue to attract investment and growth.
Bsat claimed that the development of smaller apartments was due to the fact that “buyers have become more sophisticated. they want smaller apartments but with a more effective use of space.”
“Homes have become more personal. It’s not about having a salon or dining room to receive guests anymore, real estate has become about providing smaller spaces but utilizing the space for more practical amenities, like a walk-in closet, his and her bathrooms, etc.”
Antony Stephan, director of the Courtyard and District //S projects, told The Daily Star: “The value of real estate has been stable, and stability in market price has made expats realize that this is a good market to invest in.”
Stephan pointed out that most investors and buyers are Lebanese expats, stressing the absence of Gulf demand for real estate in the market.
“Most of the end users are Lebanese, so a lot of expats are buying properties for their families here as well and not just for themselves,” he added.
Stephan believes that the demand for smaller apartments is due to an evolution in the way real estate approaches smaller spaces.
“Previously a luxurious apartment meant a big residence, but today that is no longer true. You can have luxury in a very small place.”
Samer Issa, senior product manager at Bank Audi, said: “Bank statistics have shown that more people are loaning out smaller apartments.”
According to Issa, “the average home loan today is $180,000, when four or five years ago loans used to go for about $300,000 to $400,000.”
He added that prices in the market had not decreased; the apartments have just become smaller.
“The average age for a home loaner today is 37 years old,” he said, adding that the age of home loaners is also on the decline.
He said that as of 2010 most construction permits released were for an average space of 150 square meters, adding that today the average size of the apartment has decreased to below 150.
According to Issa, the current stability in the real estate market is due to the fact that “the city has no more free space, so no new land means that there isn’t going to be a decrease in prices.”
With respect to the security situation, the product manager said the “political situation can’t get worse than it has been for the past few years, and if the value of real estate hasn’t gone down already, then it is unlikely to fall in the future.”
Danielle Irani Shammas, a representative from Sodeco’s real estate firm, meanwhile noted the absence of potential buyers and investments from the Gulf.
“It is Gulf investors and buyers who are selling real estate and not buying it,” she said.
According to Shammas, apartment sizes have gone down because middle-class families can no longer afford large apartments, prompting them to opt for smaller spaces.
She added that the decrease in sizes is also attributable to the increasing scarcity of available space for real estate in Beirut, pointing out that “new projects are tearing down old houses to make room.”
The BIEL exhibition was organized by Promofair in collaboration with the Real Estate Developers Association Lebanon, and will be running daily until June 27.
More than 50 renowned developers, brokers and financial institutions came together under to showcase real estate opportunities to interested investors and potential buyers.
- How to avoid turning your dream home into a nightmare
- The Kingdom will sure 'look different' by 2030: Saudi Arabia has 80 mega-projects up its sleeve
- Too pricey? MENA property hikes are off-putting for new buyers
- Fleeing war? UAE is the safe haven: Dubai property market is safe and secure according to a top banker
- CEO of the UAE's top developer, MAF Properties talks money and retail